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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Duker who wrote (24335)	9/16/1998 8:45:00 AM
From: Roy F	Read Replies (1) \| Respond to of 70976

Comments regarding PRIA: Message 5761322

To: Duker who wrote (24335)	9/16/1998 5:00:00 PM
From: Katherine Derbyshire	Read Replies (1) \| Respond to of 70976

I've forgotten the starting point of this conversation, but I think it was the expected seasonal boost to chip sales. My point is that it takes 18 months to build a fab. An annual seasonal uptick, whether for back to school or Christmas, has essentially zero relevance to chip equipment sales, even though it does affect chip company profits. To boost equipment sales, you need steady demand growth that is expected to continue after the tinsel is packed away. The focus on demand also misses one of the key problems in the current downturn--capacity-driven price pressures. When DRAMs dropped below $5/MB, unit volumes hit new record highs, but the DRAM companies were bleeding money. No profits means no money for fab construction. Katherine